Brayton Carlswald (Pty) Ltd and Another v Brews (245/2016) [2017] ZASCA 68; 2017 (5) SA 498 (SCA) (31 May 2017)

Brayton Carlswald (Pty) Ltd and Another v Brews (245/2016) [2017] ZASCA 68; 2017 (5) SA 498 (SCA) (31 May 2017)

The Supreme Court of Appeal held that the deed of cession executed after payment of the judgment debt was a nullity, as there was no longer a principal debt to transfer. The parties had agreed that the cession would only be valid if reduced to writing, and the written deed was the operative act of cession. At the time of execution, the debt had been extinguished by payment, and a non-existent right cannot be transferred. The respondent was not a surety, and the exception applicable to sureties did not apply. The court found that the reasoning of the court a quo was flawed, as it failed to distinguish between the agreement to cede and the actual cession, and incorrectly relied on...

Citation
[2017] ZASCA 68
Parties
Appellant: Brayton Carlswald (Pty) Ltd; Appellant: Martina Brews; Respondent: Gordon Donald Brews
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
31 May 2017
Case Number
245/2016
Procedural Posture
Civil Appeal / Appeal From Full Bench of Gauteng Local Division, High Court, Johannesburg
Outcome
Appeal upheld; order of substitution set aside.
Judges
Theron, Majiedt, Dambuza, Mathopo, Coppin
Legal Topics
Cession of Judgment Debt, Extinction of Obligation by Payment, Formalities of Contract, Suretyship Exception
Commercial and Corporate Civil Procedure Cession of Judgment Debt Extinction of Obligation by Payment Formalities of Contract Suretyship Exception

Case Brief

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Parties

Brayton Carlswald (Pty) Ltd

Appellant

Martina Brews

Appellant

Gordon Donald Brews

Respondent

Procedural Posture

Civil Appeal / Appeal From Full Bench of Gauteng Local Division, High Court, Johannesburg

Legal Issues

  1. 1 Is it legally competent to cede a claim after the underlying obligation has been extinguished by payment?
  2. 2 Does the execution of a deed of cession after payment of the debt result in a valid transfer of rights?
  3. 3 Are parties bound by the terms of a written deed of cession where they agreed to reduce their contract to writing?

Ratio Decidendi

The Supreme Court of Appeal held that the deed of cession executed after payment of the judgment debt was a nullity, as there was no longer a principal debt to transfer. The parties had agreed that the cession would only be valid if reduced to writing, and the written deed was the operative act of cession. At the time of execution, the debt had been extinguished by payment, and a non-existent right cannot be transferred. The respondent was not a surety, and the exception applicable to sureties did not apply. The court found that the reasoning of the court a quo was flawed, as it failed to distinguish between the agreement to cede and the actual cession, and incorrectly relied on...

Court Disposition

Appeal upheld; order of substitution set aside.

Orders

  • The appeal is upheld with costs.
  • The order of the court a quo is set aside and replaced with: 'The appeal is dismissed with costs.'